Massachusetts Senate expected to change House plan to control costs of municipal health insurance

BOSTON – State senators next week are set to unveil an overhaul of municipal health insurance that might be more favorable to public employee unions than the plan approved two weeks ago by the state House of Representatives.

Seeking to raise the stakes in the debate, the Massachusetts Taxpayers Foundation released a new report on Tuesday that found communities across the state could have together saved $3 billion over 10 years if they had been granted powers in 2001 to design municipal health insurance.

Two weeks ago, the state House of Representatives voted 113-42 to approve a bill that a union leader has called "Wisconsin-esque" because it aims to take away union bargaining rights on municipal health insurance. During an appearance 10 days ago on a national cable television show to promote his new memoir, Gov. Deval L. Patrick criticized the House bill, saying that labor lacks a "deep enough voice" in the House plan.

The House bill gives a community the option to increase co-pays, deductibles and certain other features up to the amount included in the most popular health-insurance plan offered to state employees or to move into the state health insurance plan if savings would be greater.

Stanley Rosenberg

Municipal managers and unions would talk for 30 days. If no agreement is reached, the community could unilaterally put its plan into effect under condition that it set aside 20 percent of one year’s estimated savings for a health reimbursement account to offset health costs for employees.

The Massachusetts Senate may not go that far, local senators said on Tuesday. Last year, for example, the Senate narrowly voted to approve a bill that included 45 days for negotiations and then binding arbitration if there is no deal between municipalities and unions. There is no provision for binding arbitration in the House plan.

Sen. Stanley C. Rosenberg, D-Amherst, said he would support the involvement of a "third party" to settle differences over health insurance between unions and municipal management, though not necessarily an arbitrator. Rosenberg said he would like to see more consultation and negotiation with unions than is reflected in the House plan.

"I want to be clear that there is real negotiation," Rosenberg said.

Sen. Stephen M. Brewer, D-Barre, the chairman of the Senate Ways and Means Committee, said it is expected that the Senate plan on municipal health insurance will be included in the committee's version of the state budget for the fiscal year that starts July 1. The committee's budget is set to be released on May 18.

Stephen Brewer

Brewer said a final decision has not been made on the Senate plan to overhaul municipal health insurance.

Sen. Gale D. Candaras, D-Wilbraham, said the goal is to give unions a voice and give municipalities an ability to control rising costs. Candaras said the process worked very well about five years ago when a state-appointed mediator helped settle a contract being negotiated between the now-defunct Springfield Finance Control Board and the city's teachers union.

Sen. James T. Welch, D-West Springfield, said he would like a plan that would be perceived as fair to both municipalities and unions, but may not please both sides. "I think we'll probably come up with our own way of addressing it," he said.

Welch did say that he is firm believer in collective bargaining. Welch said he wanted to control costs of municipal health insurance, not just shift more of those costs from one side to the other.

The Republican file photoSen. James Welch of West Springfield

Raymond F. McGrath, political director for the National Association of Government Employees, said he believes the Senate will be more receptive to unions than the House of Representatives. "It will be somewhat more inclusive than the House language," McGrath said.

McGrath also credited the governor, who he said may prompt a compromise between the House and the Senate. "He will not accept Wisconsin-like language in any version that comes to him," McGrath said. "It kind forces them to the middle."

West Springfield Mayor Edward J. Gibson said he supports the House plan on municipal health insurance, calling it a very good measure that balances the needs of cites and towns and organized labor. Gibson said the House plan is a win for local taxpayers.

Gibson said he would oppose the kind of binding arbitration included in last year's Senate plan. "I don't think it makes sense for anybody," Gibson said. "It's adding to the costs for both sides."

The Republican file photoWest Springfield Mayor Edward Gibson

Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, said the Senate is clearly more pro-union than the House. He said he is concerned the Senate could approve a plan that would be inadequate for producing savings.

Widmer said the House plan is a critical step for giving some relief to cities and towns.

A final plan to change municipal health insurance is likely to be decided by a House-Senate committee that would approve a compromise state budget for the fiscal year that starts July 1. The House plan is in its version of the budget.

The foundation's report, the third it has issued this year on the issue, warned that cities and towns have lost hundreds of millions of dollars and the equivalent of 6,500 of jobs in the last decade because local officials have had limited authority to manage exploding growth in health insurance costs.

The report compared each community’s actual health insurance spending between fiscal 2001 and fiscal 2010 to what spending would have been if it matched the annual growth of the state’s health insurance plan, which can set co-pays and deductibles without negotiating with unions.

More than 90 percent of Massachusetts cities and towns saw health insurance costs grow at much faster rates than the state plan's average increase of 6.4 percent per year between fiscal years 2001 and 2010.